Gap’s CEO says Amazon could be a channel to reach customers
May 17, 2016 02:42 PM
(Bloomberg)—Gap Inc. CEO Art Peck said the retailer would consider relying on third-party sellers such as Amazon.com Inc. to reach customers.
“To not be considering Amazon and others would be—in my view—delusional,” Peck said at the company’s annual investor meeting Tuesday in San Francisco. “We are always considering all of the opportunities beyond our traditional mix of channels and stores. Amazon is certainly one, and there are others as well.” Gap is No. 20 in the Internet Retailer 2016 Top 500 Guide.
Peck, 60, made the remarks after he was asked whether the company might tap Amazon (No. 1) to market products to consumers. Gap has been struggling to reverse a decline in same-store sales, hurt by sluggish traffic at many malls and a consumer shift away from apparel spending. Gap's 2015 web sales were $2.530 billion, up 1.1% from $2.503 billion in 2104, according to Top500Guide.com data.
As Amazon entices more clothing shoppers, it’s poised to become the No. 1 U.S. apparel retailer by next year, according to Cowen & Co. The flow of dollars online has taken a toll on department stores and other traditional retailers. Macy’s Inc. (No. 6) and Nordstrom Inc. (No. 18) both gave disappointing forecasts last week, dragging down stocks across the industry.
Gap shares have lost 30% of their value this year, including a 1.4% decline on Tuesday.
Peck, who took the reins last year, is coping with a slower-than-expected turnaround. He had predicted signs of sales rebounding at its Gap and Banana Republic chains this spring. Instead, sluggish store traffic continued into April. And the Old Navy business, which had been a bright spot for the company, fared especially poorly last month. Comparable sales at that chain plunged 10%, compared with the 2.6% increase analysts had estimated.
The company also said earlier this month it’s evaluating its Banana Republic and Old Navy chains to find ways to be more efficient, especially outside of North America.